From the Top
- Executive to Executive -

Jim Foy, Concerto Software’s President, CEO and Director has just steered the company through a merger with Melita. Foy is no stranger to big deals: Concerto itself was formed from the merger of Cellit and Davox in January 2002. In this discussion, he talks about the global state of contact centers, the Melita merger and Concerto’s objective: becoming the number one provider of Customer Interaction Management (CIM) solutions.

Jim Foy,
President, CEO and Director, Concerto Software


 
RealMarket: You talk with CEOs from leading companies. What do they see as the number one issue or opportunity facing the contact center today?
 
Foy: Permission-based marketing, which has been driven by recent legislation including the CAN-SPAM act and the national Do-Not-Call (DNC) list, is changing the way our customers are looking at their businesses. The new legislation has proved to be both a challenge and an opportunity, for ourselves and our customers. For example, managing compliance with telemarketing regulations can be a formidable task, but the laws have also defined a more qualified list of prospects (i.e., those willing to accept telemarketing calls), paving the way to a more productive contact center workforce.
 
RealMarket: How are companies addressing this issue?
 
Foy: We took a cooperative approach to address this issue; we wanted to be a resource and a partner for our customers, instead of simply a solutions provider. First, we spent a lot of time educating our customers and partners on what the various new laws meant and how they affected them. We diligently researched the subject and publicized our findings through many different channels, from white papers and seminars, to FAQs and webinars. Once we explained the possible impacts of the legislation, we followed up with customers to demonstrate how Concerto’s solutions could aid their compliance efforts by helping to meet new abandonment levels, working with Do-Not-Call lists, and producing the reports necessary to demonstrate compliance. By engaging them in this type of dialogue, we were able to help our customers establish a competitive advantage while others were having great difficulty reorganizing in response to the new laws.
 
It is also important to note that these regulations have put pressure on telemarketing as a way to contact consumers. This will force our customers to be creative when it comes to increasing the productivity of their contact center resources. One outgrowth of this pressure is that contact centers will increasingly blend inbound and outbound capabilities – another key strength of Concerto’s.
 
The new legislation has proved to be both a challenge and an opportunity, for ourselves and our customers. For example, managing compliance with telemarketing regulations can be a formidable task, but the laws have also defined a more qualified list of prospects....

 
 
RealMarket: Do you know of some Concerto customer successes that highlight this issue?
 
Foy: A number of our customers have successfully complied with telemarketing regulations. DNC regulations are more than a technology issue – companies have to promote an environment that supports compliance and train agents on the requirements of compliance.
 
One specific success has been Hamilton Contact Center Services, an outsourced contact center bureau. The company has high-profile clients, like Omaha Steaks and Allegheny Power, and needed to comply with the new legislation on their behalf. Also, to improve productivity, Hamilton wanted to develop a blended inbound and outbound capability and add multiple communication channels.
 
We implemented EnsemblePro, our unified contact center solution, and were able to meet their needs in both departments. EnsemblePro’s state-of-the-art predictive dialing functionality helped Hamilton to comply with FTC regulations regarding caller ID and abandoned call rates, and the company was able to avoid costly fines. Furthermore, the addition of call-blending and extra communications channels boosted Hamilton’s agent productivity, growing the company’s business as a result.
 
RealMarket: Concerto was formed by a big merger and has just recently undergone another merger, in which it also went private. What do you see as key about these moves with respect to Concerto’s success in this crowded space?
 
Foy: Any merger worth doing must be done to support a long-term strategy. The Concerto-Melita merger certainly was strategic because it helps us execute against our corporate vision of being the leader in the contact center industry.
 
To begin with, both companies have the same sharp focus on the global contact center market, with competitive intellectual property to back it up. Beyond this, the synergies are quite remarkable. Geographically, Melita brings strength in Europe and Latin America, while Concerto is well established in Asia Pacific, and both have significant presence in North America. In terms of technology, we will use our joint intellectual property and expertise to continue to enhance the solutions we deliver to our customers and the product synergies give us a greater ability to up-sell and cross-sell to the entire installed base. All told, this move is a significant step toward accomplishing our goal of becoming number one in our market.
 
In the future, we’ll certainly explore additional mergers. However, each deal we pursue will be as strategic as this one, and will help us provide even more of the solution required by contact centers.
 
There are encouraging indicators that the U.S. economy is improving. Still the recovery is fairly slow, and I wouldn’t go as far as to say CEOs and CIOs have relaxed the purse strings.

 
 
RealMarket: Given the recent economic situation, ROI justification has become paramount. How does Concerto address this with prospective and current customers?
 
Foy: ROI is always an important part of the sales process, especially in cost-sensitive times. We know that Concerto solutions provide great value, but we need to prove this to our sales prospects, and ROI is a convenient method to do this. Measuring ROI can be difficult, but we have several strengths in this regard. First of all, EnsemblePro, our unified contact center solution, creates some obvious efficiencies over traditional contact center environments that cobble together point solutions. The mix of products in this environment makes change difficult. Adding solutions to the mix, especially from multiple vendors, requires professional services that often run over initial estimates. The lower Total Cost of Ownership (TCO) of the unified solution is pretty apparent as compared to disparate point solutions. However, it’s still difficult to prove future ROI to companies that haven’t implemented our technology. To overcome this challenge, we’ll use customers as references or bring in third parties to measure ROI at some of our existing implementations.
 
RealMarket: From your perspective is the U.S. economy on an upswing again?
 
Foy: There are encouraging indicators that the U.S. economy is improving. Still the recovery is fairly slow, and I wouldn’t go as far as to say CEOs and CIOs have relaxed the purse strings. That said, I’m pleased with the progress of the last six months and expect it to continue. The economic downturn of the last several years gave us an opportunity to strengthen our competitive position, and we are optimistic that this exercise will translate to more success in 2004.
 
RealMarket: You see quite a few contact center implementations. What best practices can you share that would help other contact centers achieve higher levels of ROI?
 
Foy: Concerto sees blending inbound and outbound capabilities in one center as a definite best practice. Companies are looking to reduce inefficiencies and costs as much as possible, and the ability to seamlessly switch agents between outbound and inbound campaigns erases agents’ idle time and improves productivity. Blending will also help with agent turnover, which can be a significant cost at many centers. Agents who are motivated and challenged tend to remain in their jobs much longer than agents that frequently sit idle. Since blended solutions like EnsemblePro reduce downtime, they can have a significant impact on agent attrition. In this vein, providing customers with self-service options via interactive voice response (IVR) is another best practice. Self-service frees agents from dealing with routine inquiries, and allows them to focus on much more engaging activities like handling complex customer issues or selling.
 
Two other things we believe are best practices are integrating CIM and CRM systems, and reducing the complexity of disparate point solutions. Connecting CIM applications like ours to CRM systems that sit in a company's back-office provides front-line agents with better intelligence about customers, leading to more consistent, profitable interactions. By reducing the number of point solutions and moving to a more integrated solution, contact centers can lower costs with a single reporting structure, eliminate custom integration and facilitate an easier upgrade process.
 
Connecting CIM applications like ours to CRM systems that sit in a company's back-office provides front-line agents with better intelligence about customers, leading to more consistent, profitable interactions.

 
 
RealMarket: What is the average size of an implementation? What is the range and what percent are implementation services?
 
Foy: Our product set is very flexible and scalable, so the size and scope of our implementations vary greatly. We have 1000+ seat implementations and 50-agent implementations. We have customers who use our solutions across multiple sites; for example, a situation where call center agents are based in India, but the system is here in the United States.
 
In our experience, we clearly see that products sold along with professional services yield better implementation results. Professional services account for approximately 15% of our total worldwide revenue, although it accounts for only 10% of international revenue, due to the fact that many of our international partners perform these services themselves.
 
RealMarket: Of the large group of suppliers, whom do you most often compete against?
 
Foy: We typically see the big guys you would expect on a worldwide basis – Avaya and Genesys, for example. In different areas of the world – like China, France, Germany, and the U.S. – we often run into smaller, regional companies.
 
Outsourcing has grown to be a very sensitive subject politically. Contact centers find themselves in a tough bind -- they will always seek to lower costs but that is only part of the equation.

 
 
RealMarket: How have the economy and the Do-Not-Call legislation affected your outbound business?
 
Foy: Both when Concerto was created through a merger of Cellit and Davox and with the recent Melita merger, we went to great lengths to demonstrate our commitment to the existing products -- assuring our customers that the solutions they rely on will be enhanced and supported well into the future. That allowed the products to speak for themselves and our great technology has carried us to success, allowing us to grow our outbound business during the past year.
 
As for DNC regulations, aside from being able to help our customers comply – which has had a positive impact on their business as well as our own – we also should say that telemarketing companies represents only a segment of the outbound users we have as customers. Many of our customers use outbound dialing in financial services, collections, and proactive customer care, and aren’t subject to the regulations.
 
RealMarket: Multi-channel is certainly a reality with email, self-service, chat, etc. However, the phone still prevails. How much of your customer’s business is via telephony and how quickly is this changing?
 
Foy: Telephony will continue to be the cornerstone for our customers’ interactions for a very long time. That said, multi-channel is very important as an adjunct to voice and as part of that, telephony can also be enhanced to enable use without human intervention -- such as with an IVR. Email is also growing rapidly and can be especially effective when tightly linked to a robust knowledge base. At the corporate level, multi-channel needs to be part of the strategy and strong professional services will be key in helping customers get there.
 
RealMarket: Outsourcing became a very hot issue during the economic downturn. Now that it looks like the economy is recovering somewhat will outsourcing grow faster, slower or the same?
 
Foy: Outsourcing has grown to be a very sensitive subject politically. Contact centers find themselves in a tough bind -- they will always seek to lower costs but that is only part of the equation. For high-touch support situations, value is a critical component, many times even more so than cost. Many U.S. companies are well-equipped to provide this kind of high value. Voice over IP (VoIP) will provide flexibility for agent location, allowing people to work from home or small offices and this may lessen the pressure U.S. centers feel from outsourcing.
 
On the other hand, globalization will continue to intensify. China is a significant economic force that is growing and has a well-educated population. Canada is also starting to build a contact center business. One thing you can be sure of is that competition will force things to work out for business benefit and in the end; this is good news for the consumer.
 
RealMarket: Voice over IP (VoIP) is another hot topic. How do you see the merging of voice and data onto one network affecting Concerto?
 
Foy: Let me expand that to include standards and open systems in general. We see these as ever growing in importance to the contact center. VoIP and Session Initiated Protocol (SIP) will become increasingly significant over time. It won’t happen as quickly as the pundits forecast, though. For our part, Concerto has a planned release of EnsemblePro next year to enhance support of standards, such as SOAP, Web Services, SIP and redundancy.
 
RealMarket: Looking to the future, what is the biggest change you see on the contact center horizon?
 
Foy: We are moving toward the completely unified contact center that utilizes bundled solutions to provide a coherent and comprehensive set of capabilities. This will make contact centers more competitive in terms of their ability to support growth and drive revenue. Also, broadband will become more pervasive and make VoIP more convenient. Access to broadband will also make consumers more demanding with their use of additional channels, which will create a great opportunity for businesses to distance themselves from competitors based on the service they provide to customers across multiple channels.
 
Finally, integration with CRM and other systems is crucial. We like to say “the enterprise is the contact center.” By that we mean that all aspects of the company need to be appropriately tied into the contact center. Successful companies will take this approach moving forward.
 
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